Term, Whole Life & Final Expense Insurance Planning
Term Insurance Types
Yearly Renewal Term Insurance
5 Year Renewal Term Insurance
10 Year Renewal Term Insurance
15 Year Renewal Term Insurance
20 Year Renewal Term Insurance
30 Year Renewal Term Insurance
This is the simplest form of life insurance. In fact, these provide protection for a specified period. In fact, it provides protection for a specified period and doesn’t accumulate a cash value.
Also, the premiums are fixed over the life of the cover. Hence, term insurance cover only provides against death. So the policy will pay if death occurs during the term of the policy. The term ranges from 1 to 30 years.
There are 2 types of term life insurance covers. These are level term and decreasing term. Further, in level term the death benefit is the same duration of the policy. In decreasing term insurance, the death benefit drops over the duration of the policy.
Whole Life Insurance
Unlike term insurances, these policies remain active until they mature. Yet, they can lapse due lack of premium payments. These insurances offer the benefits of term policies and also allow growth of capital.
The insurer can only cancel these policies in the event of a fraudulent application. This too must be within a period defined by law. So, Permanent or Whole life policies pay the death benefit whenever the insured dies. Hence, there is no fixed term.
There are 2 main types of whole life insurance companies: Mutual and Stock.
Stock insurance companies - is a corporation owned by its stockholders or shareholders, and its objective is to make a profit for them.
Policyholders do not directly share in the profits or losses of the company.
Mutual insurance companies - is a mutual insurance company is an insurance company that is owned by policyholders.
Mutual insurance companies provide insurance coverage for its members and policyholders, and its members are given the right to select management.
Mutual insurance companies make mutual fund type investments into portfolios and any profits returned to members as dividends or a reduction in premiums.
What Is Final Expense Insurance?
Final expense insurance, also referred to as burial or funeral insurance is typically a form of whole life insurance policy that has been packaged, by the insurance company, in small amounts of death benefit. The death benefits may be sold with face amounts as low $2,000* and as high as $50,000**.
Insurance companies may offer a "relaxed" form of underwriting and/or a 'graded or modified" death benefit. The graded or modified death benefits are often issued based on the insureds health conditions, age and life expectancy.
Although the death benefits can be used for however the beneficiary designates, these types of insurance policies are sold or "packaged" by insurance companies to pay some or all of the costs associated with funeral or memorial service, embalming and a casket, or cremation.